Enterprise Cape Breton Corp.'s annual reports were usually upbeat and optimistic. But there was a telling line tucked into the 2012-13 report, in which ECBC conceded that “little progress has been made on some of the major projects expected to have a significant economic impact on Cape Breton …”

It’s the problem with many top-down economic development agencies around the world. They throw resources at hoped-for home runs that usually don’t happen. Worse, the efforts can leave a bitter taste. Cases in point: An exclusive marina, high-end subdivisions and lots of work for consultants to write “feasibility studies” and “business plans.”

Meanwhile, puzzled citizens in decaying communities wonder just whose strategy is being implemented.

In 1976, Muhammad Yunus was a young economics professor at the University of Chittagong in Bangladesh. He sensed that five-year plans and grand industrial strategies simply weren’t working.

So Yunus started talking to people who lived and worked in poor neighbourhoods close to the university. He asked sellers in tiny retail stalls why they were giving most of the money to middlemen, and why they didn't go into business themselves.

They said the answer was simple: They had no capital and no collateral.

Sure enough, the banks wouldn’t lend to “poor people.” Government agencies told Yunus the same thing: They couldn’t lend to the marginalized masses or make micro-grants. Governments preferred to subsidize the few wealthy promoters with fancy schematics showing how they would create jobs.

Most of the promoters’ schemes collapsed or became colossal burdens on the state, often with favouritism and corruption thrown into the mix.

So Yunus started making micro-loans himself. Instead of demanding collateral, he asked borrowers, most of whom were women, to form small support groups. He didn’t tell them exactly what kind of business to start. He was humble enough to acknowledge that the budding entrepreneurs knew what was feasible better than he did.

Others joined this movement to lend and borrow small amounts. The movement became a successful bank in its own right, owned by its members. Grameen Bank invested in housing and infrastructure, and even in the production of nutrient-enriched yogurt. Without a doubt, it lifted many people out of poverty. It generated economic growth.

Perhaps Grameen grew too big and sophisticated. For the past few years, it has been raising the ire of journalists and authorities. Has it come to exploit some of its poor clients? Was Yunus himself losing touch; bedazzled by his global stardom?

Whether or not such charges are politically motivated, as Yunus insists, Grameen is now either part of the establishment or a fixed, established target. As Grameen’s early years demonstrate, the upstarts are what are needed to fuel development.

Grameen went a long way on Yunus’s first $27 loan — a small experiment, a reflective accident. Before its Nobel Peace Prize in 2006, it grew organically.

Our own history says something about small development experiments that become real movements. Rev. Moses Coady and Rev. Jimmy Tompkins didn’t do an air-tight consultant’s feasibility study. They organized study clubs and “people’s schools” so that ideas could bubble up. They cultivated leaders. They didn’t insist on being everyone’s gatekeeper, as too many politicians still do today.

The credit union movement here started with a couple of experiments. Co-operative housing began small and tentatively. The work was grounded in values, such as those in Pope Leo XXIII’s pro-worker encyclical "Rerum Novarum" ("Of New Things"). But the approach was not ideological or sectarian. Coady and Tompkins never wrote the definitive commandments of development.

A future graduate student will probably do a thesis on ECBC, looking at the return on investment of its programs. My hypothesis: The small, accessible grants with easy application processes and flexible criteria probably accomplished more than any consultant or high-level trade mission.

Answering the riddle of economic development means knowing that answers lie in the many, not the few. Let’s encourage the attitudes and conditions for countless small experiments to happen. Let’s build our policies around that.

Tom Urbaniak is a political scientist at Cape Breton University. He welcomes opportunities to exchange ideas and can be reached at tom_urbaniak@cbu.ca.

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John MacDonald

May 02, 2014 - 08:28

The interesting thing about ECBC-formerly DARR was that in the 1970's the federal development agency responsible for diversifying Cape Bretons economy had this plan to move sheep into Cape Breton to create sheep farms while at the same time decentralizing federal government jobs from Ottawa to Halifax. Its not too hard to see why Halifax's economy is booming and Cape Bretons is lagging!

Bangladesh has a per capita income less than North Korea and one of the very lowest Human Development Indexes in the world. There is no success story there to learn from, just more corruption, government abuse and poverty. The institutionalized corruption at ECBC was well documented long before John Lynn came along, Professor Urbaniak has been one of the main apologists for it all along and only ever complained that there weren't enough charlatans getting the handouts. Now he wants to have more people handed money but just less of it and with even less scrutiny than the oligarchs got so we can reproduce the "success" is Bangladesh.

have we forgotten about the ethic committees promise to investigate the 4 political appointments take Lynn still on the payroll walked as shinny as A new dime .
Robert MacLean still chasing old coalminers and their widows trying to take their disability crumbs from them .
Ken Langley The Lawyer no one heard of him ever doing anything and the guy in Ottawa not sure what he was doing for ECBC but he was doing it in Ottawa ..
conclusion ::
the only change was its now called ACOA for the tax paying public only